BT to be forced to open up fibre cable network

Published Wednesday, July 3, 2013

BT will be made to open up its fibre optic cable network to enable greater competition, under proposals by Ofcom.

Superfast broadband customers will be offered cheaper and shorter deals and be able to switch more easily between providers under the plans, which will allow other suppliers to buy wholesale access to BT's Openreach network for as little as a month rather than the current minimum of a year.

This will allow them flexibility to offer customers contracts that do not tie them in for long periods and in addition, a one-off £50 fee paid by smaller providers such as TalkTalk to Openreach each time they take on a customer should be reduced, Ofcom said.

BT is rolling out its superfast fibre network across the country and the Government has pledged to subsidise part of the programme, but some critics are unhappy about the way it sells wholesale access to the technology.

Ofcom said its proposals for consultation, designed to promote competition between rival broadband providers, would see the wholesale cost of switching a customer from one superfast broadband to another fall by up to 80 per cent.

"These would be expected to flow through to consumer benefits in the form of lower retail prices and easier switching between superfast broadband providers," Ofcom said.

However, the regulator stopped short of setting controls on the rate charged by BT to rivals for use of its network, saying this was already constrained by competition from rival Virgin Media's superfast cable network and the availability of other, standard, broadband services.

It also said it did not want to "undermine the investment case for rolling out fibre". The regulator proposed to maintain a requirement that charges for access to the network were "fair and reasonable".

Ofcom said it was also considering new minimum standards to ensure Openreach, which installs and maintains connections to the BT telephone and broadband network on behalf of rival providers, maintains an acceptable level of performance.

The regulator said competitors had expressed high levels of concern during last year about the time it had taken for Openreach to install and repair new lines for their customers, though performance had since picked up again.

Ofcom's proposals form part of a wide-ranging review three years after it introduced the process for allowing rival providers to sell services over BT's superfast network, which at the time had fewer than 100,000 connections. By last year the number had risen to 1.4 million.

The regulator said: "Currently, if a consumer wishes to change to a superfast broadband provider, the company they are switching to must pay a £50 fee to Openreach; a charge which is often passed to the customer.

"Ofcom is proposing to cut the switching fee to between £10 and £15 and, where an existing superfast customer switches, to reduce the minimum length of the wholesale contract between BT and the new supplier from a year to a month; providing flexibility to allow telecoms providers to offer shorter-term contracts."